Which of the following statements is not true of a market?
A) An increase in demand, with no change in supply, will increase the equilibrium price and quantity.
B) An increase in supply, with no change in demand, will decrease the equilibrium price and the equilibrium quantity.
C) A decrease in supply, with no change in demand, will increase the equilibrium price and decrease the equilibrium quantity.
D) A decrease in demand, with no change in supply, will decrease the equilibrium price and quantity.

Question

Quizplus · Accepted Answer

All the other statements are true according to the basic principles of supply and demand. An increase in demand will shift the demand curve rightward, leading to an increase in both price and quantity, while a decrease in demand will have the opposite effect. Conversely, an increase in supply will shift the supply curve rightward, leading to a decrease in price and an increase in quantity, and a decrease in supply will have the opposite effect. Therefore, statement B is the only one that is not true: an increase in supply, with no change in demand, will increase the equilibrium quantity but decrease the equilibrium price.

Which of the Following Statements Is Not True of a Market